In 1998, Hotmail acquired more than 12 million subscribers in over 18 months, by spending as less as half a million US Dollars, compared to its competitor Juno who spent more than 20 million US Dollars. The only difference in their internet marketing strategy was that Hotmail appended a little promotional line at the end of every email its user sent. This created awareness amongst the other email users. This campaign made the concept of viral marketing famous (Rayport, 1996).

Viral marketing, also referred to as V-marketing (Rayport, 1996) or electronic word of mouth (Jobber, 2007), provides companies and brands with a cheap and easy way to market themselves (Rayport, 1996). However, this marketing technique is not guaranteed to succeed and there are more cases of failures than success stories (Rayport, 1996).

This report article will examine the process of viral marketing on various platforms and will analyse some examples of companies to evaluate the reason of the success or the failure of their campaigns. This analysis will be used to make recommendation for the implementation of viral marketing for McDonalds™ and Intel.

Viral Marketing

What is Viral Marketing?

Viral marketing is the online equivalent of word of mouth (Strauss, El-Ansary and Frost, 2003: 388). It is described as any strategy that uses any form of digital media to encourage individuals to rapidly multiply and pass on a marketing message to others to influence them, hence increasing its exposure exponentially through a self-replicating process (Kirby & Marsden, 2006: 88).

It can be argued that, as internet markets are networked, any message or publicity, be it positive or negative, will hypercharge the spread of message; and it is this ability of digital media that clones word of mouth marketing in a digital form, providing a forefront to this technique of marketing communication (Haig, 2001:5).

Word of mouth spread quickly online, via email, discussion forums, chat rooms and so on (Haig, 2001:87). It is becoming a central platform for interactive marketing communications. Evangelism marketing, which can be referred to as advanced technique of word of mouth marketing, creates consumers who actively promote their favourite products and services to family, friends and business associates (Ferguson, 2008).

Viral marketing is successful in creating evangelists, by providing its customers an online reviews and discussion-forums. It can, thus, be concluded that viral marketing is able to identify and create brand evangelists; which is addressed as one of the vital questions by Ferguson (2008) regarding the viral marketing campaigns.

It can also be argued that crowdsourcing is a form of viral marketing as the process of creating a campaign for a brand is run by the consumers themselves. For instance, PepsiCo™s Doritos and Pepsi Max Brandsco – created Super Bowl Commercials with their consumers, awarding $1.4 Million in Prizes, which was run online (Fritolays website).

Brands, these days, invest millions in the implementations of viral marketing campaigns (Kirby & Marsden, 2006: 91). Hence, it can be concluded that viral marketing yield results and help companies achieve their primary objective – Sales, and hence profits.

However, there are few other questions posed by Ferguson (2008), which should be critical examined by anyone who plans to implement a viral campaign. The companies should consider them if they plan to run a viral marketing campaign

Will help them build market share?
Can their effect on the bottom line be measured?
Can a new viral campaign be associated to an existing loyalty marketing effort?
Can create customer advocates using only its online video or software, used for the campaign?

The Phases of viral marketing

The questions posed by Ferguson (2008) will be answered by analysing the phases of viral marketing.

viral_marketing_phases_thinketcCompiled by the author

Phase 1: Any successful viral campaign begins with a buzz generation, which kick-starts the viral spread (Kirby & Marsden, 2006: 95). The potential brand-advocates use the free media channel to speed the word, which can be internet micro environment or internet macro environment (Chaffey, Mayer, Johnston and Ellis-Chadwick, 2003).

The planning stage involves setting objectives, developing strategies and the viral idea, story or theme that can create buzz and developing a creative brief. This stage also includes integrating media, PR and other creative development departments, as discussed in phase 2 (Kirby & Marsden, 2006: 96).

To address the third question of Ferguson (2008), mention above, it is vital that in this stage the company takes care that this new viral campaign is associated to an existing loyalty marketing effort and more importantly, to the company. For instance, the Subservient chicken™ campaign by Burger-king received views from more than 46 million, but they failed to realize that this campaign was related to Burger-king, and even worse, to a sandwich (Kirby & Marsden, 2006: 102).

Phase 2: This stage involves distribution of buzz story in places and sharing it with people with greatest potential to spread and influence (Kirby & Marsden, 2006: 96). Statistics 2.1 shows that different set of people have different reaction to viral messages and this should be considered to make this process more efficient.

Statistics “ 2.1
– 89% of adults share content with friends, family and associates by e-mail

– 63% of the respondents share content at least once a week
– 25% share daily or almost daily
– 75% forward content up to six other people
– 89% have no adverse feelings to brand sponsorship
– 5% refuse to share content that contains a clear brand message (eMarketer website)

Phase 3: In this stage, bloggers pick up the story and start writing about this. The actual chunck of people, who spread the word, is not yet involved. The stories are personalised and moves beyond personal retailing. For instance, Guardian wrote about the viral campaigns of Selfridge and Gap in one of its articles, and this spreader the word to the actual group of people responsible for the viral effect (Guardian website).
Phase 4: The speed at which the message spreads depends on the user as shown in statistics2.1, which react at a different frequency by forwarding it to a different group of people at different rate.

This phase also includes a bigger number of people sharing the content of the social networking websites that they are active on, like Facebook and Twitter. Though micro-blogging services are not used a lot by teenagers (Guardian), Facebook is more popular amongst them.

Sociologists indicate that people with many casual social connections have a larger influence on communities than the people with fewer strong connections. The viral messages excel with these weak ties. The movement of message over the web excels in the practically infinite collection of weak ties in virtual communities (Rayport, 1996).
Phase 5:

The Viral messages, referred to as virus, become an epidemic only when they reach a tipping point. It means that the message must spread enough until it reaches a certain threshold of visibility and scale (Rayport, 1996). To explain, take the example of a message that double each year, if the campaign begins with 1000 emails, then after a year it will only be 2000, but after 5 years it would be 16,000 which can be called an epidemic.

Viral marketers must understand that the impact of exploiting weaklinks does not come overnight.

Jeffrey Rayport (1996), in his article in Time magazine, suggested six rules to succeed in a viral marketing campaign. The rules as listed blow support the phases of viral marketing, discussed above.

Rule 1- Stealth:

Rule 2 – Patience

Rule 3 – Message as the target-audience their core interests.

Rule 4 – Be the host

Rule 5 – Benefit from the power of Weak-ties

Rule 6 – Aim to reach the Tipping-point

Case: Repositioning McDonalds™ (Jobber, 2007: 317)

What happened: In 2002, McDonalds™ was opening 4 stores a day in its global market, however it decided to close 25 stores in 2003 and planned to not open any new stores in 2004. Also there was a 66.6% decline for McDonalds™, as favourite meal, amongst 13-15 years old.

This was the same phase, year 2003, when Burger-king, one of the biggest competitors of McDonalds™ (Datamonitor), launched a subservient campaign which was viewed by 46 million people (Kirby & Marsden, 2006: 102).

Why Viral: The early years of 2000 first decade was when internet was booming. There were some of the greatest social websites which were launched then, for instance Facebook, which was launched on February 4, 2004 (Facebook info- website) and MySpace already existed (MySpace info- website) People were really looking forward to internet and there were success stories like Hotmail, as discussed earlier, to refer to.

Celebrity chef Gordon Ramsay was hitting on McDonalds™ image and McDonalds™ was ready with a new menu, which was healthy and improved (Jobber, 2007:319). It would have been a good decision of McDonalds™ to created something viral, like Burger-king™ campaign, but properly target it unlike burger-king. This would have helped in the ways suggested in the next section.

How well does it work: There are enough evidences to argue that going viral for a sandwich company is a good idea. Burger-king managed to involve 46 million people in its campaign and McDonalds™ current page on Facebook, for US region alone has 7,730,453 users who like the page (Facebook“ McDonalds™ page). However, all this page does is it directs the users to the main website.

Facebook has more potential than this. Barack Obama’s campaign for the 2008 Democratic nomination, second-quarter fund-raising total $31 million exceeding Hilary Clinton’s total by more than $10 million. Obama was able to achieve this only with an aggressive campaign over Facebook and MySpace, leveraging the financial power of thousands of small donors (TIME website).

What problem will it solve: It would have created awareness for McDonalds™ brand. While the competitors were trying the innovative methods, McDonalds™ would have not left behind in the race. This would have created a strong awareness of the new healthier menu at McDonalds™ and better, since the words would have been the consumers, it would have been like an appreciation and may have resulted in an online evangelism marketing.

How does it contrast with marketing approach in the past: While rebranding itself, McDonalds™ paid a lot of attention to its product, but left out on promoting it, effectively? It can hence be argued that this was not an optimum marketing mix and most probably the reason that McDonalds™ didn’t cope with the situation and its sales stunted despite product development.

McDonalds™ sells sandwich and burgers. It needs repeat-visits to retain its customer and hence relationship marketing. Viral marketing succeeds when customers spread words. It will be appropriate to comment that one only pass on the viral message if they are happy with it. Hence, it has an emotional value attached to it. A successful viral campaign, thus, have a huge group of happy customers. They talk about your brand and are more like to choose you when given a choice (Ferguson, 2008).

Hence a successful viral campaign ensures a successful relationship marketing as well.

Case: Intel inside out (Jobber, 2007: 415) B2B case study.

What happened: Intel faced competition from AMD and also had a new CEO appointed. AMD invented new microprocessors and Intel was not ready for this. Its major clients like Dell, HP and Google moved to AMD and consequently, Intel lost some of its market share. As a result, Intel launched better processors and entered new markets like wireless devices and healthcare.

Why viral and what problem will it solve: This was the first time that Intel was working on rebranding itself (Jobber), and more than products, its focus was marketing. It took risks by entering new markets and changing the company structure.

Intel was a brand associated with computer as it produced the brain of every computer, the micro-processor. It would have be a great idea to begin the re-branding campaign with a viral message. It had spend $2 billion on marketing communication, but missed to try this innovative concept of that time. Since, its competitors were benefitting from being innovative; this would have provided Intel with a good opportunity to get back its innovative image.

How well does it work: In 2001, Unleashed media, a B2B company, tried a viral campaign in a small scale as an experiment and it succeeded. By launching a viral game and spreading them via emails, within a month they received requests for information / sample from 135 new clients (MarketingSherpa Inc, 2003).

Intel tried a viral campaign in 2009, with an aim to offer an alternative take about its brand image to its customers, and succeeded. Intel decided to create the world’s biggest Intel chime, using five big cannons, five big tubes and five engineers, who volunteered, with helmets on; to be shot on the giant tubes to create the chime sound (Intel website).

Intel could have run this campaign earlier, to maximize its chances of success when it was attempting to rebrand itself.

Research shows that B2B is a booming market as 93% of B2B respondents, who were surveyed, described themselves as ‘very’ or ‘fairly’ confident about the future economic climate for their organisation. With 90% expecting their marketing budget to increase or remain constant in the next two years (Brookes and Chesher, 2007).

However the use of use of digital marketing techniques is limited beyond a website and basic email marketing. Only 52% of companies are currently investing in search marketing, less than 10% have used viral and 5% podcasts or webinars. Despite the hype, actual exposure to and through these channels is very limited, and it is likely that companies are missing opportunities (Brookes and Chesher, 2007).

Intel missed this opportunity too, for a long time.

As seen, the problem with Intel was not acquiring new clients but to retain the existing clients. They worked hard to enter new markets but there were fewer evidences to retain the ones who were choosing to move to AMD. Intel had the need for relationship marketing while it was busy with transactional method. It could have used both the methods parallely.

As McDonalds™ in the previous case, Intel did come up with new products but failed to convey that to its clients who were switching to an alternative, at the right time.

Viral marketing would have only enhanced its image and probably Intel might have retained some, if not all, of its clients.

Challenges:

The challenge faced by companies with viral campaign is best described by Andy Sernovtz, CEO of WOMMA and author of Word of Mouth Marketing: How Smart Companies Get People Talking, who quotes, People like to talk about brands. We now mention 20 or 30 brands a day in the course of regular conversation. So the word-of-mouth challenge is to get people to talk about your business (Ferguson, 2008).

Conclusion:

This report addresses the questions raised by Ferguson. It shows that viral marketing may have been a transformative paradigm but probably it may not alter the way businesses connect and build relationships with customers. It can also be concluded that viral marketing is not a fad and its process is too scientific. If executed will proper planning then it addresses the questions raised by Ferguson (2008).

It can be assumed that with a successful technique, merged with loyalty marketing efforts, marketers can identify prospects and build advocacy with high “value segment.

References

Books:

Jobber, D (2007). Principle and practice of marketing . 5th ed. London: McGraw-Hill.

Haig, M (2001). The e-marketing handbook. London: Creative print and design. 5.

Kirby, J and Marsden, P (2006). Connected marketing. 2nd ed. The Netherlands: Butterworth-Heinemann.

Strauss, J. El-Ansary,A and Frost, R (2003). E-marketing. 3rd ed. New Jersey: Pentice Hall. 388.

Journals:

Ferguson, R. (2008). Word of mouth and viral marketing: taking the temperature of the hottest trends in marketing. Journal of Consumer Marketing. 25 (3), 179-182.

Brookes, S and Chesher, O. (2007). B2B marketing: an undervalued sector?. Business to business advertising. 483 (1).

Websites:

Rayport, J. (1996). The Virus of Marketing. Available: http://www.fastcompany.com/magazine/06/virus.html?page=0%2C0. Last accessed 7th April 2011.

Guardian website:
http://www.guardian.co.uk/technology/2006/dec/04/news.retail?INTCMP=SRCH – accessed on 8th April 2011

Fritolays website :
http://www.fritolay.com/about-us/press-release-20110207.html – accessed on 10th April 2011

eMarketer website“ http://www.eMarketer.com – accessed on 8th April 2011

Facebook info website –
http://www.facebook.com/facebook?sk=info – accessed on 9th April 2011

Facebook “ McDonalds™ page –
http://www.facebook.com/mcdonalds – accessed on 9th April 2011

TIME website-
http://www.time.com/time/magazine/article/0,9171,1640402,00.html – accessed on 7th April 2011

MySpace info- website –
http://www.myspace.com/Help/AboutUs – accessed on 9th April 2011

Intel website –
http://www.intel.com/en_uk/cannonbells/index.htm – accessed on 9th April 2011.

Others:

MarketingSherpa Inc (2003). Proven Tactics in Viral Marketing. Electronic: MarketingSherpa, Incorporated.

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I’m an eCommerce Project Director at an agency in London and a consultant for a number of eCommerce start-ups. I founded Think etc 9 years ago which now lets me share my research and experience with all the interesting brands, people, places and projects that I have been privileged to work with.

My work on crowdsourcing was published by Oxford as part of a journal article and I have been obsessing over eCommerce and Magento over the past several years.

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